SP Setia eyes 10% property sales growth after surpassing FY18's target

KUALA LUMPUR (Feb 27): SP Setia Bhd is targeting sales of RM5.65 billion for the financial year ending Dec 31, 2019 (FY19), up 10% from the RM5.12 billion new property sales achieved in FY18. 

In a press briefing on the group's financial results today, SP Setia president and chief executive officer Datuk Khor Chap Jen said the RM5.12 billion sales it achieved last year exceeded its initial target of RM5 billion. 

Local projects contributed RM4.12 billion or some 80% to the tally, while international projects generated RM1 billion or approximately 20%.

With unbilled sales in the pipeline amounting to RM12.32 billion, 45 ongoing projects and a balance land bank of 9,516 acres with an estimated gross development value (GDV) of RM149.70 billion as at Dec 31, 2018, Khor expects the group to stay resilient against prevailing market challenges, saying outlook remains positive. 

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“We think the current challenging (economic) condition will still carry on in 2019. But we believe that the residential property market has bottomed out, so the worst is over and it can only get better. But how fast it gets better this year, will depend on whether there will be any catalysts in the property market. 

“We hope the economy gets better, so that the sentiment gets better. We also hope that the government relaxes the lending guidelines — this will help spur the market,” he said.

“We can see that the government is already helping with affordable housing, in which they have come up with incentives for the segment. But we are hoping they will extend (the incentives) to the broader market,” Khor added. 

In order to achieve the sales target, SP Setia plans to launch RM6.80 billion worth of properties in FY19, comprising RM6.66 billion local launches and RM139.0 million international launches, with the latter being new phases in Eco Lakes and Eco Xuan in Vietnam. 

The local launches will be concentrated in the central region, with RM4.98 billion worth of launches planned. This includes new projects from I & P land banks such as Setia Alaman (as an extension of Setia Alam), Setia Mayuri in Semenyih, and Setia Tropicale in Salak Tinggi. It is also launching Setia Safiro in the newly-acquired land banks in Cyberjaya. These four new projects have a combined GDV of RM786 million. 

In addition, SP Setia will continue to launch new phases in the group’s established developments like Setia Alam, Bandar Kinrara, KL Eco City and Setia Ecohill 2, as well as rebranded projects of Setia Alamsari, Alam Sutera and Kota Bayuemas in the central region. 

Planned launches in the southern region total RM1.17 billion, largely from Setia Tropika, Bukit Indah, Setia Indah, Setia Eco Gardens and Taman Industri Jaya. 

As for the northern region, it is planning launches worth RM349.3 million. SP Setia will launch its maiden residential properties at Setia Fontaines in mainland Penang, priced at RM330,000 onwards, following the well-received launch of the shop offices in FY18.

To the east, it is planning launches worth RM163.5 million in the Aeropod.

Khor said the company’s unsold units are currently still at a manageable RM1.4 billion level. He added that the pile has been steadily decreasing over the last few years. The current tally is also below 30% of its total sales.

— theedgemarkets.com

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